The best bidding strategies on Google Ads

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SEM · 03 / 11 / 2017

Applying good bidding strategies in Adwords is essential to maximize the performance of an account and achieve the different business objectives of each company. Depending on what our customer wants to achieve, we will have to apply different bidding strategies. Therefore, in this article we will analyse different scenarios of different businesses and the most appropriate bidding strategies that can be applied for each particular case.

As you know, there are two types of bidding strategies: automatic and manual. Through the automatic strategies, the Adwords system automatically adjusts the bids to achieve the desired objectives, in the established budget. On the other hand, manual bidding strategies offer complete control over the maximum CPC, which can be adjusted according to the historical data and account performance.

The two strategies can be used altogether. For example, if in a campaign where manual maximum CPC bids are used, there are some keywords that do not reach the desired conversion cost, the Target CPA strategy can be applied only to these keywords, without affecting the entire campaign.

In this post we are going to focus on explaining how automatic Adwords bids work and we will exemplify it with different cases to know which ones should be used at each moment to improve the performance of an account.

CASE 1. I aim to get a maximum conversion cost of x €

If the goal of a company is to get a maximum CPA, The Conversion optimizer can be a huge help. Adwords looks at the historical data of an account and automatically adjusts bids to reach the campaign-level CPA. To be able to activate the Conversion optimizer you have to have at least 15 conversions in the last 30 days, is what the system needs at least to learn the trends and make more precise adjustments.

The disadvantage of this strategy is that you will simply ignore other campaign settings, such as device settings, day, time, or location. It should also be taken into account that if the CPA configured at the campaign level is too low, the optimizer will simply not show the ads because the expected result would not be fulfilled. In addition, for seasonal companies, this strategy could be difficult.

If, for example, in a campaign we have different ad groups that have different conversion costs as targets, in this case it is advisable to use the target CPA bidding strategy. It works in the same way as the Optimizer, but the main advantage is that you can set a minimum (or maximum) cost per click, which prevents the system from setting too low (or too high) bids.

CASE 2. I want to always appear in the first search results of Google

If after analyzing the historical data of an account we note for example that our ads work better when they are positioned at the top of the page, you can use in this case the strategy of segmentation by location in the page of Search. What this does is automatically adjust the bids for a campaign or ad group to show them at the top of the page or on the first page of Google search results.

One advantage of this strategy is that you can apply MAXIMUM CPC limits, not to spend too much or you can also choose to bid a percentage of the estimate that Google recommends to appear at the top of the page.

CASE 3. I want to be positioned better than my competition

In this case it is advisable to use the top Ranking strategy, which will make Adwords adjust the bids automatically to place the ads above their competitors. Suppose that by a group of keywords we have noticed that the competitor X is always better positioned than us, when using this strategy the system will adjust the key words to overcome in rank a certain domain the percentage of auctions that we will tell you. You can also use a maximum CPC limit, but be careful with this setting, as the system will continue to bid until the maximum CPC limit is reached. If the competition is still better positioned, it is advisable to remove this limit from CPC and increase it.

CASE 4. I want to bring as many conversions within my budget

If you want to have a certain control over the maximum CPC, to try to obtain as much conversions as possible within the established budget, then the Improved Cost Per Click can be the appropriate strategy to use. What Adwords does is automatically adjust CPC bids based on the probability that each click will result in a conversion. The system analyzes this probability based on the historical conversion data of the account, so the more data you have, the more accurate the operation of this strategy will be.

CASE 5. My goal is to get the most clicks within my daily budget

You have to be very careful with this strategy and always watch the cost by conversion; It is possible to increase the traffic to your Web page, but if this traffic is not relevant or it does not have a good quality, then you run the risk of paying more for the same number of conversions. There are two solutions to this type of objective:

  • Use Adwords automatic bids, allowing the system to make adjustments within the established budget to achieve the maximum number of clicks.
  • Use the maximize clicks Strategy, which can be applied at the campaign, group, or keyword level. The budget for this strategy is separated from the daily budget of a campaign, which means that you have to be prepared to pay the normal daily budget plus the budget allocated to this strategy. A CPC limit can be applied to ensure that Google will not configure the higher bids than you want to pay. Attention! We do not recommend using this strategy if you are aiming at a defined CPA or ROI.

CASE 6. My main goal is to have a positive return on investment

An account may have a very low conversion cost, but these conversions are not bringing enough revenue to justify expenses. If profitability is the main goal, the most appropriate strategy to use is TARGET ROA, which automatically adjusts bids to maximize the conversion value while attempting to ACHIEVE the ROI target. For this strategy to work, it is necessary to have a conversion value assigned to the conversions, also a minimum of 15 conversions in the last 30 days and the conversion values recorded for 30 consecutive days.

So far all 6 cases with their different solutions! As you can see, more and more, Adwords bidding strategies are becoming more complex for the different marketing objectives of each company. Our advice is to test, test and test! The strategies can be used together in the same account, depending on the different objectives of each campaign, to achieve the desired general objectives.

Remember that the most important thing is to always monitor the results of our tests to measure the impact they have and make sure that there are no negative effects.

Today we talked about bidding strategies in automatic Adwords, but as you know, you can also use manual bidding strategies, developed thanks to the historical data of the account and the trends that are being seen over time.

There are different ways to analyse this data and apply adjustments at different levels to achieve the desired objectives manually. So in another post we are going to talk about Manual bids and we’ll detail how we do it in Digital Menta. Stay tuned!


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